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Independence Criteria for Outside Directors and Outside Audit & Supervisory Board Members (KANSAYAKU)

"Independence Criteria for Outside Directors and Outside Directors and Outside A&SBMs" is as follows:

NEC declares that an Outside Director and an Outside A&SBM who is not fallen under any of the following description is independent of NEC.

  1. Presently or at any time within the past three years, any of his or her relative within the second degree of relationship holds or held a position equal to or higher than a general manager at NEC or the NEC Group subsidiary
  2. Presently or at any time within the past three years, the person is or was a person executing the operations ("executing person") of a major business partner*1, or any of his or her relative within the second degree of relationship is or was an executing person at a major business partner*1 (if such a person holds or held a position equal to or higher than a position equivalent of a general manager at NEC)
  3. In any one of the past three fiscal years, the person or any of his or her relative within the second degree of relationship has received financial compensation of JPY10,000,000 yen or more (excluding remuneration for Directors or A&SBMs) from NEC
  4. Presently or at any time within the past three years, the person or any of his or her relative within the second degree of relationship has belonged to the Accounting Auditors of NEC
  5. Presently or at any time within the past three years, the person or any of his or her relative within the second degree of relationship has been an executing person of an organization that has received a significant amount of donation from NEC*2
  • *1
    Major business partner:
    1. A business partner with the total amount of transactions with NEC (consideration for offering products/services and procurements) exceeding 2% of sales of NEC or such business partner; or,
    2. A business partner to whom NEC owes the average annual amount exceeding 2% of total assets of NEC in any one of the past three fiscal years
  • *2
    Organization that has received a significant amount of donation from NEC:
    An organization that has received from NEC a significant amount of donation exceeding the greater of JPY 10 million, or 2% of the gross income of such organization, in any one of the past three fiscal years

"Immaterial Criteria for the judgement that the "Relationship with NEC" is unlikely to affect shareholders' decision concerning the exercise of voting rights" is as follows:

NEC omits the description of "Relationship with NEC" in the event that an Outside Director or an Outside A&SBM is an executing person that is fallen under the following categories.

  1. Executing person of a business partner with the total amount of transactions with NEC (sales or procurements of products/services) not exceeding 1% of the sales of NEC nor the sales of such business partner in the previous fiscal years
  2. Executing person of a business partner to whom the NEC owes the average annual amount of the previous fiscal year not exceeding 1% of the total assets of NEC
  3. Executing person of an organization that has received from NEC donation not exceeding 1% of the gross income of such organization in the previous fiscal years

NEC entered into agreements with the Outside Directors and Outside A&SBMs to limit their liabilities as stipulated in Paragraph 1, Article 423 of the Companies Act to the higher of 20,000,000 yen or the amount provided in the Companies Act and the regulation for enforcement of the thereof on condition that they perform their duties as Directors or A&SBMs in good faith and without gross negligence.